The Hole in the Middle of the U.S. Economy

Despite the encouraging jobs report in November and the upward revisions to third-quarter's gross domestic product, the economic recovery continues to feel uninspiring. Indeed, by most measures, the recovery that began in 2009 has been a disappointment. And one area in particular stands out as a letdown: household spending.

Much has been written dissecting this recovery, but less noticed is the fact that four years into the recovery, household spending is still weak. In third quarter, consumption fell to an annualized...